Homework Answers
| Year | DDB | SLN | Incremental Depreciation | Tax Benefits | PV Factor | |
| 1 | $ 110,000 | $ 55,000 | $ 55,000 | $ 22,000 | 0.935 | $ 20,570.00 |
| 2 | $ 55,000 | $ 55,000 | $ - | $ - | 0.873 | $ - |
| 3 | $ 27,500 | $ 55,000 | $ -27,500 | $ -11,000 | 0.794 | $ -8,734.00 |
| 4 | $ 13,750 | $ 55,000 | $ -41,250 | $ -16,500 | 0.735 | $ -12,127.50 |
| $ -291.50 |
Add Answer to:
Freedom Corporation acquired a fixed asset for $220,000. Its estimated life at time of purchase was...
i tried to answer 996,-996,292,-292,3201,-3201, all these were incorrect. Freedom Corporation acquired a fixed asset for...
i tried to answer 996,-996,292,-292,3201,-3201, all these were
incorrect.
Freedom Corporation acquired a fixed asset for $220,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 7% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2.) TABLE 2 Present Value of Annuity of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25%...
eEgg is considering the purchase of a new distributed network computer system to help handle its...
eEgg is considering the purchase of a new distributed network
computer system to help handle its warehouse inventories. The
system costs $50,000 to purchase and install and $36,000 to operate
each year. The system is estimated to be useful for 4 years.
Management expects the new system to reduce the cost of managing
inventories by $62,500 per year. The firm’s cost of capital
(discount rate) is 7%.
Required:
1. What is the net present value (NPV) of the proposed
investment...
Bob Jensen Inc. purchased a $1,150,000 machine to manufacture specialty taps for electrical equipment. Jensen expects...
Bob Jensen Inc. purchased a $1,150,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net cash inflow is expected to be $265,000 each...
Freedom Corporation acquired a fixed asset for $120,000. Its estimated life at time of purchase was...
Freedom Corporation acquired a fixed asset for $120,000. Its
estimated life at time of purchase was 4 years, with no estimated
salvage value. Assume a discount rate of 7% and an income tax rate
of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C,
TABLE 2.)
Required: 1. What is the incremental present value of the tax
benefits resulting from calculating depreciation using the
sum-of-the-years’-digits (SYD) method rather than the straight-line
(SLN) method on this asset? Use the...
Cascade Mining Company expects its earnings and dividends to increase by 8 percent per year over...
Cascade Mining Company expects its earnings and dividends to
increase by 8 percent per year over the next 6 years and then to
remain relatively constant thereafter. The firm currently (that is,
as of year 0) pays a dividend of $4.5 per share. Determine the
value of a share of Cascade stock to an investor with a 11 percent
required rate of return. Use Table II to answer the question. Round
your answer to the nearest cent.
TABLE II Present...
signment Saved Help Save & Exit Submit Check my work Freedom Corporation acquired a fixed asset...
signment Saved Help Save & Exit Submit Check my work Freedom Corporation acquired a fixed asset for $180,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 10% and an income tax rate of 40% (Use Exhibit 12.4. Appendix C. TABLE1 and Appendix C. TABLE 2) Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years-digits (SYD) method rather than...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B:for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapes of the Weather Report) ($18,000 Investment) Year Cash Flow $ 9,000 7,000 8,000 7,600 Project Y (Slow-Motion Replays of Commercials) ($38,000 Investment) Year Cash Flow $ 19,000 12,000 13,000 15,000 WN a. Calculate the profitability index for project X....
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....
Keller Construction is
considering two new investments. Project E calls for the purchase
of earthmoving equipment. Project H represents an investment in a
hydraulic lift. Keller wishes to use a net present value profile in
comparing the projects. The investment and cash flow patterns are
as follows: Use Appendix B for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Project E
Project H
($40,000 Investment)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Protect X (Videotapes of the Weather Report) ($ 36,000 Investment) Year Cash Flow $18,000 16,000 17,000 16,600 Project Y (Slow-Motion Replays of Commercials) ($56.000 Investment) Year Cash Flow $ 28,000 21.000 22.000 24,000 a. Calculate the profitability index for project X....
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12%...
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
i tried to answer 996,-996,292,-292,3201,-3201, all these were
incorrect.
Freedom Corporation acquired a fixed asset for $220,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 7% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2.) TABLE 2 Present Value of Annuity of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25%...
eEgg is considering the purchase of a new distributed network
computer system to help handle its warehouse inventories. The
system costs $50,000 to purchase and install and $36,000 to operate
each year. The system is estimated to be useful for 4 years.
Management expects the new system to reduce the cost of managing
inventories by $62,500 per year. The firm’s cost of capital
(discount rate) is 7%.
Required:
1. What is the net present value (NPV) of the proposed
investment...
Bob Jensen Inc. purchased a $1,150,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net cash inflow is expected to be $265,000 each...
Freedom Corporation acquired a fixed asset for $120,000. Its
estimated life at time of purchase was 4 years, with no estimated
salvage value. Assume a discount rate of 7% and an income tax rate
of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C,
TABLE 2.)
Required: 1. What is the incremental present value of the tax
benefits resulting from calculating depreciation using the
sum-of-the-years’-digits (SYD) method rather than the straight-line
(SLN) method on this asset? Use the...
Cascade Mining Company expects its earnings and dividends to
increase by 8 percent per year over the next 6 years and then to
remain relatively constant thereafter. The firm currently (that is,
as of year 0) pays a dividend of $4.5 per share. Determine the
value of a share of Cascade stock to an investor with a 11 percent
required rate of return. Use Table II to answer the question. Round
your answer to the nearest cent.
TABLE II Present...
signment Saved Help Save & Exit Submit Check my work Freedom Corporation acquired a fixed asset for $180,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 10% and an income tax rate of 40% (Use Exhibit 12.4. Appendix C. TABLE1 and Appendix C. TABLE 2) Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years-digits (SYD) method rather than...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B:for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapes of the Weather Report) ($18,000 Investment) Year Cash Flow $ 9,000 7,000 8,000 7,600 Project Y (Slow-Motion Replays of Commercials) ($38,000 Investment) Year Cash Flow $ 19,000 12,000 13,000 15,000 WN a. Calculate the profitability index for project X....
Keller Construction is
considering two new investments. Project E calls for the purchase
of earthmoving equipment. Project H represents an investment in a
hydraulic lift. Keller wishes to use a net present value profile in
comparing the projects. The investment and cash flow patterns are
as follows: Use Appendix B for an approximate answer but calculate
your final answer using the formula and financial calculator
methods.
Project E
Project H
($40,000 Investment)
($36,000 Investment)
Year
Cash Flow
Year
Cash Flow...
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Protect X (Videotapes of the Weather Report) ($ 36,000 Investment) Year Cash Flow $18,000 16,000 17,000 16,600 Project Y (Slow-Motion Replays of Commercials) ($56.000 Investment) Year Cash Flow $ 28,000 21.000 22.000 24,000 a. Calculate the profitability index for project X....
1 Appendix B Present value of $1. PVF PV=FV Percent Period 1% 5% 8% 9% 12% 1 2. 3 0.893 0.797 012 4 6 7 8 9 10 .............. 11 12 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.672 0.608 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0.453 0.372...
Most questions answered within 3 hours.
-
Calculate the equillibrium constent K for a redox reaction that
has E°cell = -.98 V at...
asked 2 minutes ago -
3. draw a diagram of the magnetic field:
a. around a long straight wire with a...
asked 3 minutes ago -
A concave spherical mirror has a radius of curvature of
magnitude 19.6 cm.
(a) Find the...
asked 4 minutes ago -
If you titrated 30.0 mL of 0.1 M HCl with 0.1 M NaOH, indicate
the approximate...
asked 11 minutes ago -
NADH passes electrons into the electron transport chain. List
the carriers that would receive the electrons,...
asked 19 minutes ago -
A cylindrical cable with a resistivity of 1.6x10-8 Ω·m and cross
sectional area of 3x10-5 m^2...
asked 19 minutes ago -
True or False.
A consumer with convex preferences who is indifferent between
the bundles (5,2) and...
asked 23 minutes ago -
A diamond's index of refraction for red light, 656 nm, is 2.410,
while that for blue...
asked 36 minutes ago -
Compare HPLC, SPE, and GC. Identify the differences, the
advantages, and the weaknesses of each method.
asked 37 minutes ago -
Characteristic x-rays emitted by potassium have a wavelength of
0.374 nm. What is the energy of...
asked 39 minutes ago -
there is a function to create two random numbers between 1 and
25 and a function...
asked 58 minutes ago -
At a certain temperature, the ?pKp for the decomposition of
H2SH2S is 0.832.0.832.
H2S(g)↽−−⇀H2(g)+S(g)H2S(g)↽−−⇀H2(g)+S(g)
Initially, only...
asked 51 minutes ago